Is it a good company at a reasonable price? This is not a dividend stock, so currently I would have no interest in buying it. It has not done well for its shareholders in the past. Analysts expect it to do better this year and next. It would be a good sign if they start to pay a dividend again. There are probably better consumer stocks to pick. The stock price could be cheap or on the reasonable side.
I do not own this stock of Dorel Industries Inc (TSX-DII.B, OTC-DIIBF). I am following this stock because I used to own it. I am always curious about what happens to stocks after I no longer hold them. I bought the stock in 1999 and 2000 and sold in 2006. I lost 1.2% per year. If I had continued to hold it to today, I would still have lost money, probably around 5% per year.
When I was updating my spreadsheet, I noticed even the Adjusted Profit is negative. It has been since 2020 and an adjusted earnings loss is expected this year, but an adjusted profit is expected in 2025. The EPS was positive in 2022 and the company gave out a $12.00 special dividend with an EPS for that year of $4.18.
If you had invested in this company in December 2013, for $1,011.50 you would have bought 25 shares at $40.46 per share. In December 2023, after 10 years you would have received $616.12 in dividends. The stock would be worth $156.25. Your total return would have been $772.37. This would be a total loss of 3.41% per year with 17.04% from capital loss and 13.63% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $40.46 | $1,011.50 | 25 | 10 | $616.12 | $156.25 | $772.37 |
Currently, no dividends are being paid regularly by this company. They did a $12 special dividend payment in 2022.
The Dividend Payout Ratios (DPR) are shown are for the special dividend of 2022. The DPR for 2023 for Earnings per Share (EPS) is good at 0% with 5 year coverage at negative because of earnings losses. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 0% with 5 year coverage at 18%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 0% with 5 year coverage too high at 89%. The DPR for 2023 for Free Cash Flow (FCF) is good at 0% with 5 year coverage a bit high at 59%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | -2593.75% |
| AEPS | 0.00% | 17.65% |
| CFPS | 0.00% | 88.57% |
| FCF | 0.00% | 58.72% |
Debt Ratios are generally not good and the debt is too high. The Long Term Debt/Market Cap Ratio for 2023 is far too high at 1.54 and currently at 1.63. The Liquidity Ratio for 2023 is good at 1.44 and 1.48 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.53 and currently at 1.76. The Debt Ratio for 2023 is low at 1.29 and 1.27 currently. I prefer this ratio to be 1.50 or high. The Leverage and Debt/Equity Ratios for 2023 are far too high at 4.45 and 3.45 and currently at 4.66 and 3.66.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.54 | 1.63 |
| Intang/GW | 0.78 | 0.76 |
| Liquidity | 1.44 | 1.48 |
| Liq. + CF | 1.62 | 1.62 |
| Debt Ratio | 1.29 | 1.27 |
| Leverage | 4.45 | 4.66 |
| D/E Ratio | 3.45 | 3.66 |
The Total Return per year is shown below for years of 5 to 31 to the end of 2023 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.00% | 6.65% | -18.74% | 25.39% |
| 2013 | 10 | 0.00% | -3.41% | -17.04% | 13.63% |
| 2008 | 15 | 0.00% | 1.91% | -9.51% | 11.42% |
| 2003 | 20 | 0.00% | 0.07% | -8.32% | 8.38% |
| 1998 | 25 | 0.00% | 1.73% | -5.39% | 7.12% |
| 1993 | 30 | 0.00% | 7.55% | 0.35% | 7.20% |
| 1992 | 31 | 0.00% | 7.34% | 0.41% | 6.93% |
The Total Return per year is shown below for years of 5 to 31 to the end of 2023 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.00% | 7.06% | -18.23% | 25.29% |
| 2013 | 10 | 0.00% | -6.14% | -18.84% | 12.70% |
| 2008 | 15 | 0.00% | 1.35% | -10.07% | 11.42% |
| 2003 | 20 | 0.00% | 0.22% | -8.35% | 8.57% |
| 1998 | 25 | 0.00% | 2.68% | -4.82% | 7.50% |
| 1993 | 30 | 0.00% | 7.85% | 0.37% | 7.48% |
| 1992 | 30 | 0.00% | 8.74% | 1.27% | 7.48% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and useless. The corresponding 10 year ratios are also negative and useless. The corresponding historical ratios are 8.12, 11.04 and 12.84. The current ratio is 7.66 based on a stock price of $6.99 and EPS estimate for 2024 of $0.91. This ratio is a low one. It is below the low ratio for the historical median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are negative and useless. The corresponding 10 year ratios are 8.16, 12.81 and 14.65. I cannot use the AEPS estimate for 2024 because it is negative. However, the AEPS estimate for 2025 is $0.23 and this implies a P/AEPS Ratio of 22.18 based on a Stock Price of $5.10. This ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a similar result in CDN$.
I get a Graham Price of $8.17. The 10-year low, median, and high median Price/Graham Price Ratios are 0.53, 0.69 and 0.88. The current P/GP Ratio is 0.86 based on a stock price of $6.99. The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 0.80. The current P/B Ratio is 0.73 based on a Book Value of $205.5M, Book Value per Share of $0.67 and a stock price of $5.10. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$ and you will get a similar result in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.62. The current P/CF Ratio is 2.77 based on Cash Flow per Share estimate for 2024 of $1.84, Cash Flow of $54.4M and a stock price of $5.10. The current ratio is 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I cannot do any dividend yield testing because the dividends have been suspended.
The 10-year median Price/Sales (Revenue) Ratio is 0.26. The current P/S Ratio is 0.10 based on Revenue estimate for 2024 of $1,515M, Revenue per Share of $51.26 and a stock price of $5.10. The current ratio is 62% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
Results of stock price testing is that the stock price could be relatively cheap. The P/S Ratio test is a good test and it says the stock price is relatively cheap. Except for the P/E Ratio test which says the stock price is relatively cheap, the rest says the stock price is reasonable. There are problems with some test because of the number of recent years of earnings losses.
When I look at analysts’ recommendations, I find Strong Buy (1), and Hold (1). The consensus would be a Strong Buy. The 12 month stock price is $9.72 ($7.31 US$), with a high of $12.95 ($9.50 US$) and low of $6.99 ($5.13 US$). The consensus stock price of $9.72 implies a total return of 89.51% all from capital gains based on a current stock price of $6.99.
There is only one entry on Stock Chase for 2023 and it is a Do Not Buy. Analysts says it has never done anything and has disappointed shareholders. Stock Chase gives this stock 3 stars out of 5. Amy Legate-Wolfe on Motley Fool in 2023 says it is a legit value then. Amy Legate-Wolfe on Motley Fool in 2022 report a 10% fall in stock value due to a 122% increase in net losses. The company put out a press release via Newswire about their fourth quarter of 2024. The company put out a press release on Newswire about their first quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock and says it is up 53% over the past year and insiders are buying.
Dorel Industries Inc is a Canadian company that sells juvenile products and furniture. Its segments include Dorel Home and Dorel Juvenile. Its geographical segments include Canada, the United States, Europe, Latin America, Asia, and other countries. Its web site is here Dorel Industries Inc.
The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more. The next stock I will write about will be Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more on Friday, July 19, 2024 around 5 pm. Tomorrow on my other blog I will write about Passive Investing Problem.... learn more on Thursday, July 18, 2024 around 5 pm.
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